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The Commissioner Didn’t Just Spill Water on Her Way Out of the FTC

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I have heard this story at countless antitrust conferences: If rivals speak of price fixing, best to spill water and walk out, because this way people remember you left (insert forced laughter here). I have heard it in a variety of presentations, with a variety of panelists taking credit for it.

Christine Wilson, the Trump-appointed commissioner of the FTC, considers her resignation letter in the Wall Street Journal to be spilling the water, an alert that something is terribly amiss. In her view, Chair Lina Khan’s tenure at the FTC has been one of lawlessness. Due process eliminated! Disregard for the rule of law! Her hyperbole is, well, Trumpian.

None of these are new complaints. I’ve addressed her claims of bias (and those of others) in The Sling. Mark Glick and I have addressed her claims of Marxism here. We have addressed her laments about non-compete rulemaking here. We have addressed her complaints about the scope of Section 5 here. Her latest accusations are tired reruns of past laments.

The real story is that Commissioner Wilson’s views of antitrust are increasingly becoming passe and reactionary, as the flaws of consumer welfare theory are exposed and its pro-monopoly, anti-enforcement legacy become solidified. It is fortunate that Commissioner Wilson, who has not yet resigned officially resigned, recognizes that the FTC is no longer a good fit for her way of viewing antitrust enforcement.

In throwing insults and accusations, however, Commissioner Wilson oversteps the bounds of decency and inflicts harm on the agency.

Commissioner Wilson’s Assertion of Bias

Commissioner Wilson argues that Chair Lina Khan’s prior writings create the “appearance of unfairness” in the Meta/Within matter and laments the Chair’s failure to recuse herself from an administrative proceeding that is now (and perhaps always was) moot, allegedly harming “due process” and “federal ethics obligations.” 

Yet the caselaw suggests that Chair Khan was on firm ground. In FTC v. Cement Institute, the Cement Institute challenged the FTC’s ability to be impartial (based on due process) because the agency had written reports to Congress discussing price fixing in the cement industry. The agency’s report was the basis of launching an investigation. So, of course, the Cement Institute sought to claim that such a challenge would violate due process. The Court rightly said no: “It is manifestly desirable that the terms of the commissioners shall be long enough to give them an opportunity to acquire the expertness in dealing with these special questions concerning industry that comes from experience.” But if Chair Khan’s FTC had written reports of Meta’s anticompetitive acquisitions, I suspect Commissioner Wilson would object even more strongly of bias.

That the pre-appointment vision of a pro-enforcement Chair should be held to a higher standard than that of an agency report signed by sitting commissioners is an odd argument. Per Commissioner Wilson’s logic, it is fine for a nominee to be sworn into the Commission with decades of experience defending companies against the antitrust laws, with visions of hamstringing the Commission to a narrow and falsely limited notion of a statute exactly mirroring other statutes in scope. It is also fine for a nominee to favor artificially limiting the scope of antitrust law based on now antiquated economics (consumer welfare theory) that was never contemplated by Congress at passage of the FTC Act. But it is somehow not fine for a sitting Chair to articulate her support of stopping the dominant platforms from swallowing the Internet before being appointed as Chair.

Beyond claims of bias, Commissioner Wilson spews insults and labels. She hurls inflammatory phrases like “bias” and “Marxist” and “critical race theory” in her loud exit and other writings. Despite the attempt to paste labels of unpopular political positions, SCOTUS has noted that there is a “presumption of honesty and integrity” in appointees. It is difficult to overcome this presumption, no matter how many times one smears an adversary wrongly and publicly.

Claiming bias in a regulator’s prior thinking and positions is a tired attack vector in administrative law. In the rulemaking context, prior writings and work by a decision maker were the basis of a legal challenge asserting bias—one the D.C. Circuit rightly saw as ill-conceived. In a case in which industry argued bias against a regulator seeking to ban drift gillnet fishing, who previously wrote against the practice, the court recognized bias “only when there has been a clear and convincing showing that the Department member has an unalterably closed mind on matters critical to the disposition of the proceeding.”

To Commissioner Wilson, Chair Khan’s research and prior thinking create a violation of due process against Meta and perhaps others. I have argued her prior research isn’t a violation, and have laid out why I believe it isn’t. To others, such as Matt Stoller, there are deeper connections to Commissioner Wilson’s assertions of bias that go beyond policy, including direct compensation from Bristol-Meyers Squibb. Others have labeled her a “naysayer.” I suppose it is not a violation of due process for a company to have a precommitted ally on the Commission. One might even call that “policy,” but Commissioner Wilson disagrees. So, what should we call the antitrust “naysayer” who exudes her own bias against government enforcement of the antitrust laws?

Commissioner Wilson argues that Chair Khan’s “appearance of unfairness” is the trouble. But throwing stones from a glass house has risks.  Is it mere coincidence that along with Commissioner Wilson’s letter, another editorial appeared in the Wall Street Journal on the same day and the following day along similar lines? Or was it a concerted effort with people outside the agency to attack the Chair? It has an “appearance of unfairness.” My point here is not to engage in ad hominem, but rather to show that spilling water does not require one to have evidence. One can merely label, blame, and spill water without it meaning anything at all.

A Disagreement Concerning Policy Is Not An Abuse of Power

What about the Chair’s allegedly ignoring years of experience and thinking that validate consumer welfare theory? Consumer welfare theory is not in the statute. It is an ambiguous term with multiple meanings and flaws, not entirely unlike the terms she objects to in her resignation letter (“nefarious.”). The consumer welfare revolution overturned 80-plus years of antitrust thinking. And, using Commissioner Wilson’s words, the new policy “contained no descriptions or definitions of these terms, many of which also lack context in the law.” Glass houses and stones more than water spilling here.

In other administrative realms, such a reversal is not a problem. For example, in labor law, the D.C. Circuit has said that “it is a fact of life in NLRB lore that certain substantive provisions of the NLRA invariably fluctuate with the changing compositions of the Board.” The case, Epilepsy Foundation, is one in which the Board expanded the Weingarten rule to allow non-union employees to have representation at a disciplinary meeting. The NLRB’s order has been reversed several times since and before the decision.

It certainly isn’t a problem for the Court, either, having not too long ago overturned 100-year-old precedent in light of a select reading of economics. I do not recall Commissioner Wilson having objections.

Commissioner Wilson worries that the Court will strip the FTC of its powers under the Major Questions Doctrine should matters such as the agency’s proposed non-compete rulemaking go before it. It certainly may be the case that SCOTUS will use major questions doctrine to block FTC actions (or other administrative agencies). Should all administrative agencies stop seeking to enforce the laws with which they are charged for fear of judicial activism?  That is certainly in line with the neoliberal agenda, but a terrible way to enforce laws.

Speaking of Honesty and Integrity

Commissioner Wilson is not a paragon of collegiality. She has at several points suggested those that disagree with her are Marxists. She has, in fact, presumed dishonesty and lack of integrity in her colleagues. This is because Commissioner Wilson wrongly equates consumer welfare theory with the “rule of law.” She states that “while our civics classes taught us to prize the rule of law, Marxists have a very different view.” She asserts that such rule of law is “above or outside of politics.” One wonders what effect constant ad homimen attacks from a Commissioner on the Chair has on FTC staff morale. After all, Commissioner Wilson admits that she and her staff spent “spent countless hours seeking to uncover [Khan’s] abuses of government power.”

“Rule of Law” is a convenient expression to highlight that which someone believes in law, without foundation. Statutes, for example, are law. But Commissioner Wilson is fine not enforcing some laws, such as Robinson-Patman. And plain text becomes ambiguous depending on one’s disposition. Or as she would put it—bias.

Or perhaps “rule of law” refers to the “science” of consumer welfare theory. But it isn’t science. It’s more of a religion. If it were science, there would be a recognition of the fundamental flaws of its principles, even on their own merits. There would be a recognition of the biases and inconsistencies of the theory. And it would be rejected, as it has been in much of economics (with the exception of antitrust).

Taxes on Mergers

Commissioner Wilson argues that under President Biden, the FTC has imposed a “tax” on all mergers by merely challenging certain mergers that were heretofore waved through. Never mind that a district court just sided with Meta, owner of the leading virtual reality (VR) platform, in the FTC’s attempt to block Meta’s acquisition of the leading VR fitness app. Were Meta’s expenditures on lawyers and economic experts tantamount to a tax? And when did the presumption switch that acquisitions, including by dominant platforms like Meta, are by default permissible? There is nothing in the statute to suggest so. But Wilson’s own bias suggests that such acquisitions should be presumptively competitive, and any other policy, including flipping that presumption, is therefore wrong.

Perhaps she thinks of consent decrees and orders as taxes as well. After all, it could be argued from Wilson’s perspective (and based on her own dissents) that remedies are not needed. Indeed, having to submit an HSR form is a form of tax. So is having to pay fees to attorneys and economists to justify a merger. So is having to litigate.

One could take this argument of taxation to an extreme. Perhaps it is best to rid ourselves of the whole antitrust endeavor, and the whole factory of lawyers and economists making money from corporations striving for efficiencies. Let’s get rid of the ABA antitrust section. It’s a tax on corporations and harms consumer welfare!

Spilling the Water

Commissioner Wilson’s resignation spills no tea. And the dryness of her regurgitated accusations suggests that there was no water left in the pitcher she spilled. Something is definitely amiss at the FTC. It is the constant attack from those who seek to maintain the status quo of pro-monopoly, pro-merger, and anti-enforcement (except in the most extreme of circumstances). Uncertainty of law with pro-business policy justifications allows the defense bar to continue making money. Rules banning conduct that hurts the economy, on the other hand, are “lawless.”   

Regardless, I wish the soon-to-be-departing commissioner well in her future endeavors. Nothing I say here would diminish my support for her in taking a future position, say with the U.S. Chamber of Commerce, or any other organization deeply defensive of the status quo. In my opinion, her views are antiquated and hostile to antitrust enforcement and to consumers generally.

I write this response to spill a pitcher of water on her resignation.

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